The Celsius Network has partnered with the Horizon platform to develop a Proof-of-Reserves (PoR) system using Horizon’s zero-knowledge proofs.
According to a statement from Celsius, the company will conduct a series of experiments over the next few months to test the possibility of decentralizing some of its operations. The technical director of Celsius Nuke Goldstein (Nuke Goldstein) said:
“The biggest problem in DeFi is transparency. How can we prove to the world the accuracy of the numbers we report?”
The pilot project to test the proof-of-reserves concept will use the information that appears on the Celsius website and transmit it to the Horizon sidechain, rather than to the internal servers of Celsius.
The app will first display customers ‘ total assets by coin type and will eventually transmit Celsius transaction data encrypted with the Horizon zero-knowledge proof set.
The co-founder of Castle Island Ventures and CoinMetrics, Nic Carter, has previously repeatedly described the concept of proof of reserves and called on cryptocurrency depository platforms to implement it. He said:
“Since I’ve never seen a lender implement proof of reserves before, it’s hard to imagine what Celsius is trying to do. The zero-knowledge proofs for PoR are familiar to me, but I have never seen their implementation.”
The CTO of Celsius said that the full implementation automates the tracking of reserves directly from the blockchain and will preserve the privacy of individual accounts, so that the data will not be vulnerable to reverse engineering.
Goldstein added that the company will first offer these solutions as part of the retail portion of its loan portfolio. Celsius will also conduct concept tests at hackathons in its community.
“We’re going to bring ideas and technologies to a level where we can share them with the community and say,’ Try to find vulnerabilities and weaknesses in them. If you find something, we’ll pay you, ” Goldstein said.
However, he said, it will be years before customers can take advantage of the technology. Recall that in the spring, the Celsius Network began to cooperate with the oracle provider Chainlink to decentralize the flow of quotes when calculating interest rates on loans in crypto assets.